08 The Year Ahead – Corporate hospitality

Corporate entertainment is booming and its popularity seems likely to continue, as it is now a key component of corporate sales and marketing strategy. By Alastair Scott, Sodexho Prestige

Hospitality looks set for another bumper year

Corporate entertainment is booming and its popularity seems likely to continue, as it is now a key component of corporate sales and marketing strategy. By Alastair Scott, Sodexho Prestige

Corporate hospitality in the UK is experiencing a boom time. Our research among organisations that have used corporate hospitality in the past shows that for nearly 70%, corporate entertainment is a key part of their strategy. The same research also reveals that 42% host between four and nine hospitality events each year and 55% of respondents measure return on investment for corporate hospitality.

Sporting and bespoke hospitality, such as private dining, were the most successful. Popular events included an exclusive dinner in Paris, RHS Chelsea Flower Show, Epsom Derby and the Open Championship. 

The popularity of sporting events was confirmed by the National Corporate Hospitality Survey, with golf the most popular option. This is great news for the UK, home to The Open Championship, the world’s most famous annual tournament; and a superb choice for hospitality. All corporate hospitality at the Open meets stringent high standards and there’s a series ofoptions to meet market needs. To ensure your  guests enjoy the fantastic golf on show, always buy from the official hospitality agents. 

Uniting excellence and exclusivity
The convergence of two related factors is a major contributor to the success of corporate hospitality. The first is the steady growth in people’s desire for the exceptional. It began with premium products, the accessibility of prestigious destinations and significant increases in incomes. Now, this hunger for quality includes corporate events.

The second factor is a more widespread interest in live events, such as sports tournaments and live music concerts. The opportunity to get up close to a high profile live event is extremely attractive and for many it’s the chance of a lifetime that they will remember for a long time. 

Corporate hospitality’s role has always been to bring these two factors together. With the right experience, there’s enormous value in networking. You’ll create bonds, build one-to-one relationships and develop business partners. We all feel happier doing business with people we’ve at least met, or ideally know and trust. Corporate hospitality is a great way to begin and build on such relationships.

The Rugby World Cup 2007 is a shining example of corporate hospitality success. It was the most successful in the history of the tournament, with sales of corporate hospitality and travel packages, operated by RHT07 (a joint venture between Sodexho and Mike Burton Group), reaching more than twice the number sold for the RWC 2003 in Australia.

Remarkably, the combined total of corporate hospitality and travel packages is a third more than the amount sold at both of the last two Rugby World Cups put together. 

People chose the Rugby World Cup because it was an innovative hospitality experience, marrying excellent food with exciting environments and interactive displays, all designed to set the tournament apart from other competitions.

Three elements of success
For a corporate hospitality experience to be successful and memorable, three elements must be apparent: generosity, enjoyment and exclusivity. A memorable experience is a powerful benefit for the host brand, which benefits by association. Along with a fantastic experience, hospitality must also offer positive attributes to the brand. Sustainability, ethical production and being environmentally friendly are all important to brand owners, and Sodexho Prestige is leading the industry in introducing innovations that demonstrate a commitment to this level of corporate responsibility.

An essential component of marketing
In 2008, we expect to see more of the same. Early interest and bookings indicate that corporate hospitality favourites, such as Royal Ascot and Chelsea Flower Show, will have another bumper year, as those that have experienced successes in 2007 rebook, usually spending a little more on a bigger event. Others will join the corporate hospitality bandwagon, as corporate entertainment continues to be an essential component of marketing strategy and corporations seek to capitalise on the busy hospitality season. 

Alastair Scott, Sales and Marketing Director, Sodexho Prestige

Take the chance to impress

Hospitality should offer clients a unique, personal experience. Look no further than the Beijing Olympics, says John Stones.

An invitation too obviously calculated or a gift too meticulously costed can send out the wrong signals. While, come Christmas, it is something that we experience in our personal life, it applies equally in the corporate sphere.

So, by its very nature, corporate entertaining is not generally something companies are too comfortable talking about. It tends to be something that is effective when it is seamless, when there is no audible meshing of gears or obvious quid pro pro.

It is also an area that is pretty conservative. Many companies become known for hospitality around a particular event, and changing that can cause consternation – clients might wonder if they have not been invited or whether the hosts are in a financial predicament.

While some sectors, such as advertising, might expect novelty, many of the sectors most associated with corporate hospitality, such as financial services, law, accountancy or the motor industry, remain pretty hide bound. In the words of one hospitality professional, it is “golf, cricket, football, and then more golf”. 

So developments and trends in corporate hospitality are largely around issues such as accountability, transparency and business ethics, and in terms of the actual “product”, a greater level of personalisation to the needs of the guest or the host’s brand, rather than the actual events themselves. 

According to Susan Sexton, sales director of P&MM Travel & Events: “There is a move towards tailor-made events, with invitations that convey a sense of having been selected – something that’s an experience as opposed to an event.”

Very occasionally new events, or one-off occasions such as the Beijing Olympics lead to a change to the status quo. And after the English national football team’s failure to qualify for the finals of Euro 2008, there are now more than a few companies with spare entertaining budget who might be considering a trip to Beijing, suggests Jeff Hunter, operations director of Sportsworld, the official UK supplier of tickets and packages for next year’s Games.

Bells and whistles
Given the cost of a trip to the Olympics, some guests will baulk at the invitation, while others might have corporate governance guidelines in place that require them to, for instance, pay their own air fares. And with costs ranging between £850 for the most basic package to £11,000 for thefull 18 days with all bells and whistles, but excluding tickets and flights, it is likely that guests will be selected with utmost care.

Many companies offering corporate hospitality at Beijing 2008, says Hunter, will be leveraging some sort of association with sport, for instance support of a particular element of Team GB, even if it is far off the carefully crafted “branded” experiences that official sponsors will be offering to their guests.

And while the rationale for the hospitality  might be varied, Hunter acknowledges that hospitality spend has often been fragmented. Like many in the corporate hospitality business, he is increasingly looking to provide services to allow companies to account for this growing part of the marketing budget. “We produce reports that they can drill down into and ask, who have we invited, and why?” he says.

While, in some sectors, accountability for corporate hospitality is increasingly being considered as boards want to see a return on investment or are fearful of falling foul of accountancy  rules, in some parts of financial services regulatory scrutiny is having the opposite effect. 

In an environment where commission on sales is closely watched by the Financial Services Authority, anything that can be deemed inducement has to be treated with great caution, says John Dymond, head of corporate events and conferences for Aegon UK, the Edinburgh- based subsidiary of a global insurance company that sells though financial advisers. “We need to think how much we are spending on entertaining. For instance, if it is something expensive such as Six Nations Rugby at Twickenham, we would pitch that at managing director level and above to avoid it being seen as an overinducement,” he says. As a consequence, he vets the invites suggested by his sales colleagues to ensure they are appropriate. 

As a result, financial services uses corporate entertainment as a subtle relationship tool, to satisfy existing ones or create new ones, or even to give a platform where any grievances or other issues can be gently ironed out, explains Dymond. To make events seems more personalised and less “off-the-shelf”, Dymond and his team design and implement the hospitality themselves where that is possible, though for many of the events, such as watching Manchester United at Old Trafford, they are at the mercy of the packages available. 

“It is important to note that corporate hospitality is not bribery – it is an opportunity for like-minded folk to get together,” says Hunter. But in harsher economic conditions, hosts might find they will have to work still harder to explain to their boards why this small yet visible part of the marketing mix is important.

Latest from Marketing Week

PLEASE SIGN IN OR REGISTER. IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and inspiration that will help you develop as a marketer and leader.

Register and receive the best content from the only title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work, so we can make Marketing Week more relevant to you.

Register now

THE BEST CONTENT

Our award winning editorial team and columnists will ask the biggest questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we will be your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Dedicated to developing your skills and helping you achieve marketing excellence. Find guidance on leadership, professional development and the latest industry jobs.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here